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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE No. 15123 \ October 15, 1996
SECURITIES AND EXCHANGE COMMISSION V. GEORGE A. ROTELLI, Civil
Action No. 2:96-CV-340 (D. VT)
The Securities and Exchange Commission ("Commission") today
announced the filing of a Complaint in the United States District
Court for the District of Vermont against George A. Rotelli
("Rotelli"), a stockbroker and investment adviser formerly
associated with American Express Financial Advisors, Inc. for
misappropriating $116,988 from five clients. Rotelli consented
to the entry of a Final Judgment without admitting or denying the
allegations in the Complaint. The Final Judgment permanently
enjoins Rotelli from violating the antifraud provisions of the
federal securities laws (Section 17(a) of the Securities Act of
1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5
thereunder, and Sections 206(1) and 206(2) of the Investment
Advisers Act of 1940), and orders Rotelli to disgorge the sum of
$116,988, plus prejudgment interest of $21,385, for a total of
$138,373.
Specifically, the Complaint alleges that between November
1992 and January 1996, Rotelli offered investments in a
fictitious mutual fund that he called the "Government Securities
Income Fund IV." In fact, no such fund existed. The Complaint
further alleges that Rotelli misrepresented to his clients that
the fund was backed by U.S. Treasury securities, would generate a
return of 6.5 - 7.25%, and that their principal would be
guaranteed. In reliance on these representations, Rotelli's
clients gave him checks totalling $116,988, which, pursuant to
Rotelli's instructions, were made payable to Rotelli. Instead of
investing his clients' funds, Rotelli deposited the checks into
his personal checking account and converted the funds to his own
use. Rotelli further defrauded his clients by providing them
with fictitious account statements purportedly showing the
increase in value of their investment.
Simultaneous with the filing of the Commission's action, the
U.S. Attorney for the District of Vermont filed a criminal
information charging Rotelli with fraud in connection with his
scheme, and the Commission also instituted an administrative
proceeding against Rotelli in which he was barred from the
securities industry. Rotelli has agreed to plead guilty to the
criminal charges.
Contact Person: Grant David Ward (617) 424-5936